Update: Facebook shares are were soaring after-hours on the heels of the company's third-quarter earnings release. The update: Unbelievably the stock rose about 15 percent after the expectations-beating numbers came out, then came tumbling down, dipping into the red.
So what happened? Here's the take from AllThingsD:
Making money from mobile users — once considered a grim prospect for the social giant — has come faster than many could have anticipated; mobile revenues now account for nearly half of all ad revenues for the company. Growth is also up across the board in terms of user numbers.
Alas, that happiness was short-lived; after the stock skyrocketed 12 percent in after-hours trading to top more than $55, shares took a nosedive on the news that the company saw “a decrease in daily users — specifically among younger teens,” in its estimates. In mere minutes, the stock lost nearly $18 billion in market value.
While that’s certainly a problem the company has to solve, most of the call was fairly good news — ARPU is up, CapEx is down and mobile is humming along nice and smoothly.
Another take from Reuters:
In July, Facebook said it was showing one ad per 20 stories in the newsfeed, but Chief Financial Officer David Ebersman told analysts Wednesday that the current ratio, although slightly higher than 5 percent, would not increase much more going forward ... Ebersman's comments, combined with remarks suggesting that young teenage users in the U.S. were beginning to use Facebook less frequently, soured the mood abruptly ...
MarketWatch live-blogged Facebook's conference call. Excerpts from their blow-by-blow:
2:02 p.m. Earnings call starting. Stock up 10%. Mark Zuckerberg, Sheryl Sandberg on the call
2:12 p.m. Chief Operating Officer Sheryl Sandberg now discussing financials. Stock up 8%.
2:25 p.m. [CFO David] Ebersman says Facebook does not expect to "significantly increase ads as a percentage of newsfeed stories beyond where we were at the end of Q3."
2:26 p.m. Q&A starts. Stock now up 5%.
2:33 p.m. Stock has surrendered some gains, now up just 2.5%. Topeka's Victor Anthony tells MarketWatch it was probably the comment on a decline in daily usage among younger teens.
2:37 p.m. The comment from Ebersman about not increasing frequency of newsfeed ads may have spooked some investors, another analysts says.
2:39 p.m. Stock is now just up 1%.
2:53 p.m. Facebook shares turn negative.
2:59 p.m. Facebook's 14% after-hours stock gain: Gone. Could be comment on declining youth user growth or on caution in ramping up newsfeed ads.
Earlier